<SEC-DOCUMENT>0001193125-15-078909.txt : 20150421
<SEC-HEADER>0001193125-15-078909.hdr.sgml : 20150421
<ACCEPTANCE-DATETIME>20150305164605
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ACCESSION NUMBER:		0001193125-15-078909
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20150305

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KORN FERRY INTERNATIONAL
		CENTRAL INDEX KEY:			0000056679
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-EMPLOYMENT AGENCIES [7361]
		IRS NUMBER:				952623879
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1900 AVENUE OF THE STARS
		STREET 2:		SUITE 2600
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90067
		BUSINESS PHONE:		3105521834

	MAIL ADDRESS:	
		STREET 1:		1900 AVENUE OF THE STARS
		STREET 2:		SUITE 2600
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90067
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<TYPE>CORRESP
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">[KORN/FERRY INTERNATIONAL LETTERHEAD] </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">March&nbsp;5, 2015 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Jennifer Monick </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Senior Staff Accountant </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>VIA EDGAR </U></P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Korn/Ferry International</B> </TD></TR></TABLE> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Form 10-K for the Fiscal Year ended April&nbsp;30, 2014
</B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Filed June 27, 2014 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>File No. 001-14505 </B></P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Monick,
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">This letter responds to your letter dated February&nbsp;23, 2015, regarding Korn/Ferry International&#146;s (the &#147;Company&#148;)
annual report on Form 10-K (the &#147;Form 10-K&#148;) for the fiscal year ended April&nbsp;30, 2014 (filed June&nbsp;27, 2014). Each of your comments from the February&nbsp;23, 2015 letter is set forth below, followed by our related response. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Form 10-K for the Fiscal Year Ended April&nbsp;30, 2014 filed June&nbsp;27, 2014 </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Item&nbsp;8. Financial Statements and Supplementary </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Note 1. Organization and Summary of Significant Accounting Policies, page F-10 </U></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Revenue Recognition, page F-10 </U></B></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Please tell us the nature of the LTC license revenue and all related elements within the license arrangements.</B> </TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">During fiscal 2014 the Company&#146;s fee revenue was $960.3 million of which there was (a)&nbsp;$16.2 million in revenue under LTC license
contracts with a fixed term and (b)&nbsp;$3.1 million in revenue under LTC license contracts with a perpetual term. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The LTC license
revenue is derived from providing customers with a license to access intellectual property in an electronic format, i.e. a flat file. The Company does not host the electronic version of the intellectual property or provide software to run or access
the relevant data file. The LTC license contracts allowing access to the intellectual property take two forms: (a)&nbsp;a fixed term (generally 12 months) or (b)&nbsp;a perpetual term. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Under the fixed term licenses, the Company is only obligated to provide the licensee with access
to any updates to the underlying intellectual property that are made by the Company during the term of license, but is not obligated to provide maintenance or support during the license term. Once the term of the agreement has expired, the
client&#146;s right to access or use the intellectual property expires and the Company has no further obligations to the client under the license agreement. Under perpetual licenses, once the Company has provided the flat file to the client it has
no further obligations to the client, including no obligation to provide maintenance, support, updates or upgrades to the intellectual property. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In accordance with Topic 13.A.3.d (SAB 104), revenue is recognized as follows: (a)&nbsp;for LTC licenses with a fixed term, the Company
recognizes revenue straight-line over the license term, which is in a manner consistent with the nature of the transaction and the Company&#146;s earnings process and (b)&nbsp;for perpetual licenses, revenue is recognized when the license is
granted, which is consistent with the Company&#146;s earnings process as once the license is granted the Company has no further obligations to the client. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Note 11. Business Segments, page F-37 </U></B></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>We note your disclosure on page F-38 that you have excluded unusual or infrequent items from Adjusted EBITDA. Please tell us how you were able to determine that these adjustments are unusual or infrequent as these
adjustments appear to have occurred in two or three of the three most recent fiscal years. Alternatively, please revise your disclosure in future filings to recharacterize your description of these adjustments and provide us an example of your
proposed disclosure.</B> </TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Accounting Codification Section (ASC) 280 requires companies to report financial information on the
basis that is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. The Company&#146;s chief operating decision maker evaluates performance and allocates resources based on the
review of (1)&nbsp;fee revenue and (2)&nbsp;adjusted earnings before interest, taxes, depreciation and amortization (&#147;Adjusted EBITDA&#148;), which, to the extent that such charges occur, excludes restructuring charges, integration and
acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">In footnote #11 on page F-38 of the Form 10-K we referred to the adjustments to EBITDA to arrive at Adjusted EBITDA as unusual or infrequent.
This description of the adjustments follows the nomenclature we use inside the organization to describe such charges. In future filings, we will recharacterize the description of these adjustments as follows: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">The Company evaluates performance and allocates resources based on the Company&#146;s chief operating decision maker&#146;s review of
(1)&nbsp;fee revenue and (2)&nbsp;adjusted earnings </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>


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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
before interest, taxes, depreciation and amortization (&#147;Adjusted EBITDA&#148;), which, to the extent such charges occur, excludes restructuring charges, integration and acquisition costs,
certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting
policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Per the Staff&#146;s request, we hereby
acknowledge that: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company is responsible for the adequacy and accuracy of the disclosure in the filing; </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and </TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">We appreciate the Staff&#146;s responsiveness with respect to the Company&#146;s filing and look forward to resolving any concerns the Staff
may have. If you have any questions, please contact me at (310)&nbsp;226-6366 or Ari Lanin of Gibson, Dunn and Crutcher LLP at (310)&nbsp;552-8581. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Sincerely,</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">/s/ Robert P. Rozek</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Robert P. Rozek</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Executive Vice President and Chief Financial Officer</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top">Roger Yang, Ernst&nbsp;&amp; Young LLP (via electronic mail) </TD></TR></TABLE> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Brian Lane, Gibson,
Dunn&nbsp;&amp; Crutcher LLP (via electronic mail) </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Ari Lanin, Gibson, Dunn&nbsp;&amp; Crutcher LLP (via electronic mail) </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>

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